Fraud involves using a lie, deception, falsehood, or dishonesty in an attempt to gain a benefit. The states and the federal governments have identified some types of fraud as criminal—typical fraud crimes are explained below. Fraud can also be a civil wrong, which means that victims can bring a civil lawsuit for money damages, to compensate them for the losses they suffered as a result of the fraud. Civil fraud does not carry the possibility of incarceration or fines, whereas criminal fraud can result in both. A particular instance of fraud can be both a criminal offense and the basis for a civil lawsuit.
There are numerous categories and types of fraud, and the types described below are not an exhaustive list.
Both the federal government and the individual states have numerous laws that criminalize various types of fraud. Depending on the circumstances of the case, fraudulent activity can be either a state or federal crime, or both. This means that person who commits an act of fraud could be in violation of both federal and state law at the same time and prosecuted for both.
Mail fraud is one of the most commonly charged federal crimes. It applies to any scheme to defraud that involves using the United States Postal Service or other interstate delivery services. For example, a con artist might send a letter to a victim in an attempt to convince the victim to hand over money. Even if the con artist is unsuccessful in his attempt, using the mail in an attempt to commit fraud violates the federal mail fraud law.
Wire fraud, like mail fraud, is a federal crime—one that is quite broad and applicable to numerous types of activity. Wire fraud occurs whenever a person uses a telephone, electronic communication device, or a computer with Internet access to commit an act of fraud.
Computer fraud covers a broad range of criminal activity, including hacking into a computer or computer network intending to defraud someone. The act of defrauding could include altering or deleting records, accessing financial or other information, or obtaining something of value. Acts of Internet fraud sometimes overlap with computer fraud. Some common Internet fraud schemes include identity theft, phishing schemes, charitable contribution fraud, employment fraud, and investment fraud.
Anyone who produces counterfeit currency, documents, or goods also commits a type of fraud. Counterfeiting currency is a federal crime, but state laws can also apply if, for example, you forge false birth certificates, driver's licenses, or other documents. Manufacturing goods and selling them while claiming they are a name-brand item, such as selling counterfeit shoes, is also considered an act of fraud.
Loan fraud occurs when a person or business knowingly makes a false, material statement to a bank, financial institution, mortgage lender, or federal agency in order to obtain a loan. It's a crime even if the lender doesn't lose any money. Making a false statement to influence or mislead the decision-making process is enough.
Another common form of fraud occurs when someone fraudulently obtains, uses, or forges a credit card. Credit card fraud can occur when, for example, a server obtains your credit card numbers when you pay for your restaurant bill and uses that information to make a purchase; or when a person finds your wallet and uses your cards. In more sophisticated operations, hackers might gain access to your credit card information when you purchase something online or by tricking you into updating your payment information on a fake website.
Committing any type of fraud can lead to some significant criminal penalties. Depending on the state in which you live and the crime you're charged with, fraud can be either a felony or misdemeanor offense.
While not all types of fraud are criminal, anyone suspected of or being investigated for fraud needs to speak to a criminal defense attorney as soon as possible. The different types of fraud crimes that exist make it possible for prosecutors to charge you with a wide number of crimes, some you might not even be aware of.
If you speak to investigators without legal advice, you might unwittingly damage your case or provide the investigators with the evidence they need to charge you with a crime. Talking to a local defense lawyer who knows how to manage criminal investigations and how to defend your rights through the entire criminal justice process is the only way to ensure you are protected.